Draghi has changed Italy’s political landscape ‘dramatically,’ experts say
February 15, 2021 @ 17:22 +03:00
New Italian Prime Minister Mario Draghi is already transforming the political scene in Rome and causing stock markets to surge. In the wake of fresh political chaos, the former European Central Bank president was called upon to become Italy’s new leader and rescue its turbulent economy. His arrival has been described as “better than expected” after gathering widespread political support and stemming the threat of populist forces.
Draghi, who was sworn in on Saturday, presented his Cabinet over the weekend — a group made up mostly of politicians from different parties and some technocrats in key ministries too. “This is best possible outcome, and better than I had expected, because it provides a degree of stability and political accountability,” Erik Nielsen, group chief economist at UniCredit, said in a research note Sunday.
Draghi has managed to receive backing from most of the major political forces in Italy, following concerns that a pure technocratic team would have a short life span. The next general election in Italy is only due in early 2023. By ensuring wide political backing and a diverse team, Draghi has already improved the outlook for Italy. Analysts have become more bullish on Italian government bonds, citing “expectations of a more efficient use of the NGEU (Next Generation EU) funds, structural reforms and a better outlook in terms of vaccination,” according to a UniCredit note.
At the same time, Italy’s main share index has soared more than 7% since the start of the month. Barclays analysts believe economic growth will pick up in the second half of the year too. “The return of Mario Draghi, now Italy’s Prime Minister, has changed the political landscape dramatically,” analysts at Barclays also said in a note on Monday.
Draghi has changed Italy’s political landscape ‘dramatically,’ experts say, CNBC, Feb 15